Chapter 12 Bankruptcy | RK Pruitt Law Firm
Chapter 12 Bankruptcy

Built for family farmers & fishermen.

Chapter 12 is a specialized reorganization that pauses most collections and lets qualifying family farmers and fishermen repay debts on a realistic, often seasonal schedule—without shutting down operations.

Family farmers

Crop, livestock, dairy, timber, vineyards, and other ag operations seeking to reorganize debt and keep producing.

Family fishermen

Commercial fishing operations with seasonal revenue patterns and vessel/gear financing pressures.

Why Chapter 12?

  • Automatic stay pauses most collections & lawsuits
  • Seasonal or annual plan payments based on real cash flow
  • Tools to adjust secured debts, leases, and arrears
  • Keep operating the farm or boat while reorganizing
What You’ll Need

Key documents & information

Recent tax returns (business & personal)
Operating statements & budgets (12–24 months)
Land/equipment/vessel lists & liens
Creditor list with balances & addresses
Leases (ground, grazing, dock, equipment)
Insurance policies & licenses
Organized records speed filing and help confirm a feasible seasonal plan.
Eligibility & Fit

Do you likely qualify?

  • You’re a family farmer or fisherman with regular annual income (often seasonal)
  • Most income and debts arise from the farming or fishing operation
  • You can propose a feasible plan to pay creditors over time
  • You need relief from collections while maintaining operations
Exact statutory thresholds apply; counsel can confirm current limits and definitions.
Process

Chapter 12 in 6 steps

1
Strategy session
Review operations, seasons, creditors, and goals.
2
File & automatic stay
Filing pauses most collections; stabilize payroll, inputs, and insurance.
3
Schedules & trustee
Provide financial disclosures; a Chapter 12 trustee is assigned.
4
Propose plan
Design seasonal/annual payments that match revenue cycles.
5
Confirmation
Court reviews feasibility and fairness; plan is approved if requirements are met.
6
Perform the plan
Make payments through the trustee; continue operations under the plan.
Plan Highlights

What makes Chapter 12 flexible

  • Payments aligned with harvest/seasonal income
  • Ability to cure arrears and restructure secured debts
  • Typically 3–5 year plans, with room for seasonal spikes
  • Disposable-income test tailored to farm/fishing realities
Keep insurance current, file required reports, and stay on top of taxes to avoid plan issues.
FAQs

Quick answers

Will I lose the farm or boat?

Chapter 12 is designed to help you keep operating while reorganizing, subject to plan feasibility and creditor treatment.

Can I pay once a year after harvest?

Often yes—plans can be structured for seasonal or annual payments that match actual income cycles.

How are equipment or vessel loans treated?

Secured debts may be restructured under the plan, subject to valuation and Code rules.

Is this public?

Court filings are public, but many operations reorganize successfully and preserve long-term value.

Informational only—does not create an attorney-client relationship.